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Merckle Group - A market first restructuring

A&O advised on EUR8.3 billion restructuring of Merckle Group

Merckle Group (2009)

A&O advised the steering committee banks (Commerzbank AG, Deutsche Bank AG, KBC Deutschland AG, Landesbank Baden-Württemberg, Landesbank Hessen-Thüringen, The Royal Bank of Scotland Plc) in connection with the restructuring of the Merckle Group (VEM/Merckle-ratiopharm, Phoenix and Spohn Cement) involving loans of approximately EUR8.3 billion. A consensual restructuring was achieved with the shareholders, the respective management teams and about 80 banks which included standstill agreements, restructuring credit facility agreements and, in particular, mutually beneficial trust agreements providing for a cross-group waterfall to achieve full repayment of the bank facilities, including bonds, by way of the sale of the various corporate sub-groups. The shares in HeidelbergCement held by the companies belonging to the Merckle Group were successfully sold on the capital market by way of a secondary placement, which, as part of a restructuring, was a market first. In terms of volume, this capital market transaction was among the largest in recent years. At the time of the capital market transaction a repayment of EUR1 billion had taken place.

“A significant and complex restructuring”

Partner Peter Hoegen (Frankfurt Restructuring) commented: “The restructuring of the Merckle Group is one of Germany's most significant transactions in terms of its complexity, as more than 100,000 jobs are affected directly or indirectly.”

The A&O Team

The restructuring involved teams across the FrankfurtHamburg and Luxembourg offices.

The team of Allen & Overy comprised partners Peter H. Hoegen (leading the overall transaction), Dr Oliver Waldburg (both Banking/Restructuring), Wolfgang Melzer (Banking, all Frankfurt), Dr Helge Schäfer (Corporate, Hamburg, leading the corporate law-related part of the transaction), Dr Sven Prüfer(Corporate/Restructuring, Frankfurt), Pierre Schleimer (Corporate, Luxembourg) and Dr Asmus Mihm (Tax, Frankfurt).

Further lawyers involved: Counsels Dr Nicolaus AscherfeldMarie-Luise von Buchwaldt (both Corporate, Hamburg) and associates Dr Bernhard Herding(Banking/Restructuring), Stefan KuhmDr Tobias Wintermantel, Jochen Wurlitzer (all Banking, Frankfurt) and Dr Fabian Christoph (Corporate, Hamburg), Yannick Arbaut (Corporate, Luxembourg) and Dr Heike Weber (Tax, Frankfurt).

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